CONCEPT
The last money-raising strategy used the common 'asking for a deposit' principle. Now we shall see how a smart businesswoman used this strategy to start a new business.
The deposit you normally get from customers is used for the work or product they have ordered from you. This same principle can be used on a larger scale - to get money to stock your business with inventory.
The money acquired in this fashion would not relate specifically to the actual materials you eventually supply the customer.
PRACTICAL APPLICATION
A business owner needed money to finance the start up of a drapery business. She had thought of looking for investors — likely candidates would be interior designers who could subsequently use her services.
However, on considering it further, she decided she didn't have to give away part ownership of her new business. She could sell these interior designers on the idea of making bulk advance orders in exchange for big discounts on future purchases.
This enterprising business owner raised enough money to build a good inventory for her new business. She was also able to secure orders from the outset. And her purchases were not on speculation (as is normally the case in stocking a business) but were materials that she knew her customers would like - because she asked them.
She built her inventory without borrowing from the bank, and built her customer list with an offer that served them well.
How can you pre-sell your customers to build inventory?
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